Earning a CFA certification means passing the CFA exam. If you’re interested in becoming a CFA, or you’re planning on working with one and want to know what kind of education and training they undergo, here’s what you should know about the test.

What Is the CFA Exam?

The CFA exam is actually not just one test, but three, designated Levels I, II and III. The tests, which only come in English, are offered each year in June, with the Level I exam also available in December. Future CFAs must pass each stage of the exam, in order, to achieve the certification.

You’ll need a valid passport to register for the exam, along with meeting at least one of these requirements:

Hold a bachelor’s degree or equivalent

Be in the final year of your bachelor’s degree program at the time of registration

Have four years of professional work experience

Have a combination of work and college experience totaling at least four years (cannot be part-time)

CFA Exam: Levels I, II & III

In terms of content and structure, Level I of the exam covers 10 topics. They fall into these general categories:

The exam is conducted in two sessions of three hours each, morning and afternoon. Each session features 120 questions, for a grand total of 240 over six hours. The CFA Institute recommends that exam-takers allot themselves 90 seconds to answer each question. All exam questions are multiple choice.

Level II includes 120 questions instead of the 240 you’ll answer for Level I. The exam is broken up into morning and afternoon periods, with 60 questions per session. Exam questions cover:

Level III of the exam is a mix of both multiple choice questions and essay questions. During the morning session, you’ll answer anywhere from eight to 12 essay questions. In the afternoon, you’ll shift focus and work on 60 multiple choice questions. The topics are the same as Level II.

How Difficult Is the CFA Exam?

The CFA exam is distinctly tougher than the typical standardized tests you might have taken to get into college. According to the CFA Institute, the pass rates for students who took the exam in June 2018 are as follows:

Level I – 43%

Level II – 45%

Level III – 56%

“This is a graduate level program and requires substantial, consistent effort over time,” says Cynthia Meyer, a CFA and financial planner at Financial Finesse, a financial wellness company. “Passing each level requires mastering a comprehensive body of knowledge.”

The CFA Institute doesn’t release the minimum passing score for each level, but based on these numbers, it’s obvious that taking the exam isn’t easy. Attaining a passing grade requires hours of study and preparation.

What Does the CFA Exam Cost?

You’ll pay multiple fees to take the CFA exam. For 2019, the one-time enrollment fee is $450. The standard registration fee for each level of the exam is $950. There is an early bird discount that drops the fee down to $650. If you register late, the fee increases to $1,380.

Assuming you register on time and at the standard rate, the total cost of taking each level of the CFA exam is $3,300. You could, however, pay closer to $5,000 if you register late for each level. The CFA Institute offers several scholarship programs for eligible exam-takers to help with the cost.

You can also purchase a print version of the curriculum for $150.

Preparing for the CFA Exam

In terms of how much time you need to put in to get ready for the CFA exam, Meyer recommends a minimum of 300 hours. Assuming you study three hours per day, seven days a week, you’d need to give yourself a good three months and change to prepare. Meyer says she studied two hours a day, five days a week, beginning in the fall, to prepare for a June test date. The last two months prior to taking the exam, she increased her study time to include half-day practice exams.

The CFA Institute offers online materials to help students prepare, along with a directory of exam prep service providers. Meyer says taking review classes can be well worth the cost to potentially increase your chances of passing the exam on the first try and avoiding expensive retakes. Be prepared for the extra cost of getting professional tutoring and instructional help.

“Unless you’ve been working as an analyst for a long time, or just finished your Master’s in Finance, you’ll need to budget another $600 to $1,500 per test level for prep classes and materials,” Meyer says.

If you can’t afford to take CFA exam prep classes, you can also purchase review books that guide you through the types of concepts the exam covers. Some also offer practice problems and tests to give you another level of preparation for what to expect on exam day. This can be a cost-effective way to get ready for the exam, but it requires a certain amount of discipline to make sure you’re studying thoroughly.

Bottom Line

Earning a CFA certification can help to demonstrate to prospective employers or clients that you have specialized knowledge and expertise in investment analysis. Getting your CFA requires taking a three-part test. The test it’s not easy, and it’s important to consider how much time you can commit to studying and preparing before registering. Also, think about whether being a CFA speaks to the type of work you actually want to do. You may find that another designation, such as the certified financial planner (CFP) designation, might be more appropriate for your professional goals.

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Rebecca Lake Rebecca Lake is a retirement, investing and estate planning expert who has been writing about personal finance for a decade. Her expertise in the finance niche also extends to home buying, credit cards, banking and small business. She's worked directly with several major financial and insurance brands, including Citibank, Discover and AIG and her writing has appeared online at U.S. News and World Report, CreditCards.com and Investopedia. Rebecca is a graduate of the University of South Carolina and she also attended Charleston Southern University as a graduate student. Originally from central Virginia, she now lives on the North Carolina coast along with her two children.